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make proper use of it?
stitutes the solution of what is called the railroad problem.

That is the simple question, the proper answer to which con

And this is a practical question which I propose to solve in the manner described by an organized co-operation of the railroad companies under governmental sanction and

control.

I am fully aware of the fact that it will be some time before their conviction will take hold of the public mind, and result in practical legislation; but I feel very certain there is no other solution to the problem, and if it is to be solved at all, it is to be solved in the way proposed.

I am strengthened in this conviction by a letter I recently received from Baron Von Weber, who is considered the great railroad authority of Germany, and who has given much attention to the subject under discussion. I sent him some time ago the description of the railroad association which was published in the number of April 7, 1876, of the Railroad Gazette, containing the suggestions to establish railroad government under control of the General Government. He says:

"Your explanation and description of the railroad association was to me of the greatest interest, and I am free to say that I consider your organization a 'master work.'

"I agree with you perfectly that only in the self-control of the individual railroads, in accord with governmental regulations and control, the great problem can be solved which has lately been attempted by the project of the empire purchasing all the railroads in the country. In the mean time the great genius, Prince Bismarck, has studied the question and understood it, and has come to the conclusion that in this direction nothing can be accomplished. I have the satisfaction to know that my writings have done wonders to help to this conclusion. But now when the question is asked, What is next to be done? your communication comes just in time. I propose to work up your plan in the official organ of the German Empire, and hope that it will aid much in clearing up the difficulties in the way of a solution of the problem."

Question 41. Does the association make any allowance in its prorating arrangements for difference in the cost of transportation over the various roads, or if the prorating is upon an equal rate per mile transported?

Answer. In prorating no difference is made on account of difference in cost on the different roads. If this was attempted it would tend to innumerable difficulties. In the first place very few roads know or can know what it costs them to do a certain class of business. The theory is, that each road is entitled to the advantages it may possess in lower cost of transportation, and each road must stand the disadvantages of its line under which it may labor. I do not think it practical to introduce any other system. This one is accepted by all roads in the country.

Question 42. Is the Southern Railway and Steamship Association a body-corporate which can sue and be sued, or, on the other hand, are its mandates merely of binding force as between the various members?

Answer. The Southern Railway and Steamship Association is not a body-corporate. Each member has signed an agreement to do certain things, among others to pay the expenses of the association. This agreement can be legally enforced like any other contract. The members agreed to have this contract in force until January 1, 1877, and for this reason cannot voluntarily withdraw before that time.

Question 43. It is stated in a New Orleans paper that Louisville sells more Louisiana sugar than New Orleans does, and this is attributed to the fact that Louisville sends her commercial travelers who solicit patronage all over the South, whereas New Orleans merchants attempt to plod along in the old way of waiting for merchants to come to town. Will you please give your views upon this subject?

Answer. The statement that Louisville sells more Louisiana sugar than New Orleans, can only refer to the retail trade. New Orleans sends sugar to the wholesale trade to Montgomery, (perhaps Mobile,) Memphis, Nashville, Atlanta, Louisville, Saint Louis, from which cities it is distributed through the country, leaving to New Orleans a very small territory to be supplied in the retail trade. Texas is supplied from Shreveport and Galveston. I have not been able to ascertain what is the extent of the retail trade of New Orleans; you may possibly get that information from your New Orleans correspondent.

I find that Louisville shipped via Louisville and Nashville Road, in 1874-75, 19,824 barrels and 213 hogsheads of sugar, and received by the Louisville Railroad 6,201 hogsbeads, the latter all from New Orleans. A considerable quantity is brought up by river.

New Orleans can sell the Louisiana sugar cheaper than any other market.

A large trade is carried on through the drummers. They visit with their sample trunks every place in the country, and no doubt are facilitating and cheapening trade and commerce. While there always have been these commercial travelers, their operations are no doubt much extended, on account of the traveling facilities furnished them. The sleeping-car enables them to rest at night, and occupy usefully every day. This, however, is only true when long distances are to be overcome. They visit, how

ever, all country places, and have to move from one to the other, when short distances apart, in day-time.

Question 44. For the purpose of illustration merely, will you please to state about how much greater is the capacity of a double-track railroad than of a single-track road; that is to say, suppose both to be operated to the full limit of its capacity, how much more freight tonnage, all things being equal, could the double-track road carry than the single?

Answer. I consider the ultimate capacity of a double-track railroad only twice that of a single-track road.

It might at first sight appear that it should be more. But when passenger and freight trains are run over the same track, it makes no difference whether the same number of trains are run in one or in both directions upon one of the tracks. The time consumed and risks are the same. The reason that leads us to suppose that the double track gives greater safety and capacity arises from the fact that comparison is generally made between a single track worked to its full capacity (over-crowded perhaps) and a double track to which the same traffic of the over-crowded single track is transferred, which is the case when another track is first built, to relieve the single track.

But comparison is to be made between a double and single track, both worked to their full capacity, and then I believe that the capacity of a double-track road is precisely double that of a single-track road.

I am thus particular in giving my reasons for this view as I have not heard the expression of other railroad managers upon this subject, and do not know their views or reasons therefor, but know that there is a general impression of the greater safety of the double track, but that only can apply when comparison is made between a certain traffic on a single track being transacted upon a double track, or to traffic less than the limit of capacity of a double-track road.

Question 45. What proportion of the entire single-track railroads of the country should you estimate are not employed to more than three-fourths of their full carrying capacity?

Answer. The total train-mileage made on the 7,400 miles of railroad in the United States during the year 1875, was about 315,000,000, or per mile of road per year 4,257, (leaving out of consideration the small proportion of double track, calling it all single track.) Estimating the number of passenger-trains as one-fourth of the total mileage, we have 33-87 freight-trains per day per mile of road as the average of all roads. I have estimated the ultimate capacity of single-track roads in my answer to question 15 as 54 freight-trains, hence the roads in the country are only taxed to cent. of freight-carrying capacity.

16 per

APPENDIX No. 2.

ANSWERS TO INQUIRIES IN RELATION TO COMMERCE BETWEEN THE WESTERN STATES AND THE STATES ON THE ATLANTIC SEABOARD, AND TO THE VARIOUS INTERIOR LINES OF TRANSPORT BY LAKE AND BY RAIL BETWEEN THE WEST AND THE SEABOARD, BY MR. J. D. HAYES, OF DETROIT, MICH. 1876.

Question 1. Please to present an estimate of the percentage of first, second, third, and fourth class tonnage of the east-bound business on the trunk lines extending from Chicago to the seaboard. Also an estimate of the same kind with respect to westbound traffic, referring to data employed by you in arriving at your estimate. Answer. The percentage of first, second, third, and fourth class tonnage, east-bound, is about the same each year, unless something extraordinary occurs to change it, such as a very short crop of fruit at the East, while the supply at the West is very large, causing an unusual movement.

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Per cent.

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.80

100

.36

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100

The above may vary some, but that is about my estimate for the past 9 years. Over the average of roads between Chicago and the seaboard cities, the east-bound would include live stock upon a basis of average fourth-class. Sometimes the rates have been very much above, and sometimes very much below fourth-class, owing to competition.

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Question 2. A schedule showing the various fast-freight lines operated on the roads extending from the Western States to the Atlantic seaboard, (including the roads of Canada,) the roads to which the co-operative lines belong, and, as nearly as can be stated, the number of cars employed in each line.

Answer. Schedule of fast-freight lines on New York Central Railroad and its connections:

Red Line, about 4,000, cars, co-operative.

White Line, about 3,000 cars, co-operative.

Blue Line, about 4,000 cars, co-operative.

Merchants' Dispatch, about 2,700 cars, stock-company.

Detroit and Milwaukee, about 800 cars, co-operative.
Saginaw Valley, about 400 cars, co-operative.

International, about 2,000 cars, co-operative.

Hoosac Tunnel, recently formed, co-operative.

Canada Southern, about 2,000 cars, co-operative.

Several oil lines, running from the oil-wells in Pennsylvania and from Enniskillen, Ontario.

On the Erie Railway and connections: Erie and North Shore Line, Commercial Express, Great Western Dispatch, Diamond Line, and several oil-lines.

On the Grand Trunk Railway of Canada are the National Line, and their own through line from Detroit to Portland and Montreal, using in all from 8,000 to 9,000 cars, connecting with the Allan steamships from Montreal in summer, and from Portland from December 1 to about 1st of May.

The Pennsylvania Railroad and Baltimore and Ohio Railroad have the Globe, Empire, Star, Union, Continental, and others, using on all the above lines a total aggregate of not less than 60,000 cars; making a capacity to carry an average of 30,000 tons per day from the West to the seaboard.

Question 3. Please to mention some of the more important characteristics of the traffic in which the several through freight-lines are principally engaged.

Answer. The territory at the West from which each fast-freight line collects its freight, is from nearly all points west of Pittsburgh, Buffalo, and Suspension Bridge. The lines passing over the Grand Trunk, Great Western, Detroit and Milwaukee, and Michigan Central, are considered "northern lines." Those going over the Lake Shore, Erie, and Pennsylvania Railroads are known as "western" and "southwestern" lines; the Baltimore and Ohio being southeastern in direction, but its connections at Baltimore with the steamship lines and coastwise eastern trade make it in reality a strong competitor for the same markets that the other east and west roads are.

Nearly all these lines compete with each other upon the produce of the West in nearly all sections; extreme northern lines controlling the bulk of pine lumber, while the southern lines secure the bulk of cotton going East, north of Chattanooga; the Red and Blue lines taking the bulk of the trade from China and Japan via San Francisco. Question 4. A statement as to the peculiar work performed by the fast-freight lines and the economic and commercial purposes which they subserve, i. e., the advantages realized by the railroad companies and the public.

Answer. Fast-frieght lines. The work done by them, when done upon the cooperative plan, is simply to interchange a certain kind of cars painted red, white, blue, or by designating that each connecting line have arranged for a certain number of such cars to be set aside as their allotted quota in such through line. Such quota being considered as their proper proportion according to distance, and the nature of the business to be done, and the time required for doing it. These cars are turned over to a joint agent, or general manager to run them for the joint benefit of all the roads. The mileage of each road's quota being credited to the road for whose account they are running, and the total miles run by line cars over its road is then charged, so that if more miles are made in the lines by its cars than its pro rata proportion of the whole according to business, then that road is charged or credited with the difference at the rate of one cent per mile per car to settle mileage balances. Doing business in this manner over several roads, brings it down to one management for the benefit of all. For example, a car starts from Chicago to Boston, 20,000 pounds at 50 cents per 100 pounds is $100. The through bill is made for it, and the proportion of each company's earnings is given as follows:

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Each company collects from the next its own proportion and the back charges, until the car gets to Boston, where the total is paid by consignee. But in case of an overcharge or undercharge, or loss or damage, then the manager investigates it. If found to be correct, then each company is charged or credited with its share in proportion to the earnings, unless the loss or damage is located on one of the roads, then the whole amount is charged to that road. This method saves clerical labor, prevents the delay and cost of unloading and checking out of the goods from one company to the other at each terminal point, and enables the public to do their business with one line as a whole, while the four roads forming that whole, save time and labor, yet get their own share of through earnings, just the same as if no through line had been formed.

The general freight agents of the roads forming such a line meet once a month to audit the managers' vouchers. They accept or reject them as they deem proper for t'ir own roads, but generally they agree, so that no difficulty grows out of settling

the accounts. Line cars sent to local stations to load off the main line, are billed "local" to a line station, and their charges paid and put upon the line way-bill as "back charges." This enables the road that loads a line car and runs it ten miles, to deliver its contents to the line without the cost of transfer, by paying 10 cents each way for mileage upon the line car, at the same time saves the receiving road the expense of loading, weighing, checking, and delay of cars at the receiving-line station.

Question 5. During the period of demoralization and depression of through rates, which followed the failure of the Saratoga compact, was there any advance made in local charges, or did such rates remain stationary, or fall?

Answer. The "local rates" were not changed in consequence of the Saratoga compact at its commencement or at its failure.

Question 6. A copy of the Saratoga compact of August, 1874, with a statement of the causes which led the trunk-lines to enter into such alliance, the practical workings of the same, the causes which led to its abandonment, and the results which followed. Answer. Copy of the Saratoga compact, marked No. 1, is sent herewith.

The trunk lines supposed, by their Saratoga agreement to leave the making of rates to the commissioners having no interest in the roads, that they would satisfy the public and harmonize conflicting interests among the roads.

The canses which led to the abandonment of this compact were very numerous, and which were pointed out to some of the railway officials on the day the agreement was made at Saratoga, 30th July, 1874. The Grand Trunk and Vermont Central form a line from Boston to Detroit of themselves. They claim truly that they cannot get a fair share of business from Boston at the same rates that the more direct fast-freight lines get via the Boston and Albany Road. Therefore they must accept less rates. Their connections at Detroit may refuse to accept a pro rata of the rate made by them. But their line being so long, they have the choice to pay the difference out of their share of the earnings, or, during the season of navigation, to insure on the lake and deliver the goods at Milwaukee for the Northwest, and at Chicago for the West and Southwest by their own line of steamers from Sarnia. In that way they secure more money than to ship by rail all the way and pay the pro rata proportion west of their own line of any arbitrary rate made by commission; therefore being independent, and having two direct rail-connections from here, they can and do make such rates out of Boston and Portland to the West as secure to them a share of the business. Their situation is such that they could not in justice to themselves become parties to the Saratoga compact without first securing for themselves an agreed discrimination in rates, which the Boston and Albany Railroad would not allow. They claimed to be the short direct line out of Boston having thousands of empty cars running west, therefore could and would carry freight as cheap as other lines. If the New York Central refuse to accept their proportion of the rate from Boston, then the Boston and Albany Road, being only 200 miles long, might have to carry the goods over its road for nothing, besides, in some cases, paying something more for the privilege of maintaining a foothold in Boston. Therefore the balance of the line must in fairness carry the goods at their share of the price necessary to secure them or lose the business entirely. Such being the case no commissioner could make a rate for the Grand Trunk or the Vermont Central; neither for the Baltimore and Ohio Roads, the latter taking goods by water to Baltimore, insuring them, which is equal in effect to "all rail;" consequently, as soon as either of these roads agreed to the commissioners' rates, their business would be gone. They claim the right, and have the power, to make rates for themselves, and unless the Boston and Albany with their connections meet it, they surrender their business into the hands of their rivals.

The same thing occurs at New York with the Baltimore and Ohio Road as against the trunk lines. Then, again, when such a compact is formed among railroads it cannot wipe out the contracts then in force. Each company out of New York agreeing to submit its contracts at some future time, I am inclined to think some bad faith has been practiced in securing or renewing contracts with their choice customers. So that the effect of such an agreement has been virtually destroyed by the contracts in force having a long time to run at lower rates than the commissioners' rates would warrant. The vast number of empty cars running west is also a great temptation to give some considerations for business that might be entirely beyond the power of the commissioners to deal with, there being no penalty for violation of commissioners' orders when they conflict with the roads' interests. The east-bound business was also to some extent beyond the power of the commissioners to deal with. They could not deal with the rates on the lakes, canals, and rivers, nor upon the ocean, all of which go to influence the business and the rates upon the rail proportion of such through-business. Water-rates on grain from Chicago to New York, via lake and canal, have their influence upon all that portion of country tributary to them; therefore, while the New York Central and Erie Railroads may have no interest whatever upon lake, yet they have a direct interest in working in harmony with lake rates, as against the Erie Canal from Buffalo to New York. While the Grand Trunk works in harmony with lake from Sarnia at one end and the Montreal line of steamships at the other, as against the lakes

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